Regional focus: Brazil & Southern Cone
President-elect Cristina Fernández de Kirchner recently revealed her interest in reaching an agreement with the Paris Club but on the condition that it should not be subjected to another deal with the International Monetary Fund.
Fernández' main foreign policy objective is that of attracting more foreign investment. An agreement with the Paris Club is therefore necessary, as export agencies of member countries of the Club are not permitted to supply subsidised financing for companies seeking to do business in a country, like Argentina, where bilateral debt is in default.
However under current Paris Club rules, a debt restructuring would require that Argentina sign up to an IMF program - something the Argentine government is unwilling to do. Argentina paid off its loans to the multilateral last year in order to free itself from politically unpopular audits.
Nevertheless, having attended Fernández' inauguration, the new president of the IMF, Dominique Strauss-Kahn, expressed hopes that Argentina and the Paris Club would reach a repayment deal on US$6.3 billion in defaulted debt without IMF involvement. He stressed that the solution was "much more in the hands of the Paris Club" than the IMF, but added that the Fund could get involved if the Paris Club sought IMF approval of a rescheduling plan agreed with Argentina.